Businesses run on funds. Regardless of how innovative your idea or service is, it can only come to fruition and be sustained when funds are available to keep it running.

To run a business effectively, entrepreneurs need to acquire requisite knowledge and skills to manage their funds effectively. Here are a few tips that can help entrepreneurs succeed in financial management.

1. Establish financial goals

Goals are important, they are the gateway to financial success — J. D Roth
Goal setting is essential to the success of any business. We not only set organisational goals we also need to set financial goals. Financial goals are targets, often driven by specific future financial needs.

To achieve financial success, entrepreneurs must set SMART (SMART means — Specific, Measurable, Attainable, Realistic and Timely) goals that will ensure they are accountable and make real progress.

2. Separate business expenses from personal expenses
Keeping business and personal expenses separate is important. Never mix the two. Also, as an entrepreneur, your personal finances, should be in good shape. This means the leader cannot worry about something like, how to pay for my house rent, or other expenses, if they are building a top quality business. It is necessary to save 12-18 months of monthly budget requirement.

3. Have an effective savings scheme
As an entrepreneur, it is important to have a savings plan. This is because when your personal financial situation is put at risk, your company will also be put at risk. Whether you are currently navigating the entrepreneurial waters or plan to take the leap in the future, make sure you build up your personal emergency reserves.

Though this is not a rule of the thumb, experts advise savings at least 20 per cent of your income periodically. This could be setting aside 20 per cent of your income daily, weekly or monthly either in your account or in a place where you may not have immediate access to it.

According to a financial expert, Chinenye Okoli, you should see it as paying yourself first.

“Every day you are paying somebody, either the driver, the water seller, the internet service provider, or your are paying for utility, one way or the other, you are paying everybody but not yourself. Savings is a way to pay yourself first”.

4. Invest wisely
According to Phil Lodico, a social entrepreneur and angel investor, the more a company can diversify and invest in its future, the greater its chances of success. As an entrepreneur, you cannot build the company of your dreams or make the billions you desire by just saving a few cash steadily, you have to invest.

Thankfully, there are different investment opportunities you can try out. The Nigerian Stock Exchange for instance, offers a wide range of products including shares (equities), exchange traded funds (ETFs) and bonds, all of which are available for purchase and sales on the largest stock exchange in the West African sub-region.

5. Track your expenses
Running you business with monitoring the cash flow is akin to driving a vehicle blindly. One needs know seer to tell what the end of such journey will be. It is important for you to be well aware of how the income accrued is utilised towards achieving your organisation’s goals.

This, experts say, will help you make better decisions and give you better insights on how you and your entire team need to spend your resources.
Remember, if you do closely monitor your cash flow, you are going to be out of business soon. If you can, hire a full time staff to handle the ledgers but if you cannot, you can work with an expense tracking software. Do not forget to always work with a realistic budget.

6. Get the services of a financial expert
You do not have to do everything yourself. Seek the service of a financial analyst. However, it is also good for you as an entrepreneur to acquire some knowledge and skills in financial literacy.

https://www.makeitglobal.biz/entrepreneurs/financial-success-entrepreneurs/

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